The Chinese Communist Party (CCP) held an economic work conference in Beijing a week after its sudden abandonment of “zero-COVID” amid exponentially increasing citizen reports of COVID-19 cases and deaths.
During the meeting, Chinese leader Xi Jinping stressed the need to “vigorously boost market confidence” while expressing strong support for the country’s private sector.
Beijing announced an end to its strict “zero-COVID” policies in early December after what observers, including the World Health Organization (WHO), believe was a strategic decision by the regime in response to the failure of the policy to stop the spread of the virus.
Experts believe that Xi’s comments indicates China’s economy is already in a deep crisis.
The Economic Work Conference of the CCP’s Central Committee was held in Beijing on Dec. 15 and Dec. 16. According to Xinhua News Agency, speakers of the conference admitted that China’s economy was under greater pressure in 2022 due to shrinking demand, supply shocks, and weakening consumer sentiment, and stated that efforts should be made to restore and expand consumption in 2023.
Xi, who has personally cracked down on China’s private enterprises in the past several years, claimed at the conference, “I always support private enterprises.”
The meeting also promised to ensure the stability of the real estate market, support the development and growth of private enterprises, and promote employment of young people, especially college graduates.
Compared to a year ago, there were significant changes in a number of statements made at this year’s economic conference. For instance, Vice Premier Liu He talked about rolling out new policies to save the struggling real estate industry and Wang Chaodi, chief inspector of the China Banking and Insurance Regulatory Commission, spoke of promoting digital platform industries.
Moreover, supporting private enterprises was mentioned five times at the conference, indicating that the authorities expect private enterprises to play an important role in driving economic growth next year.
Local Officials Focus on Private Sector, Foreign Investment
From Dec. 1, top officials in many provinces already started visiting private enterprises, offering to help them attract investment and alleviate their financial difficulties.Anhui’s Party boss Zheng Zhajie hosted an event called “Optimize economic environment and stabilize the economy” on Dec. 1. Sichuan’s Party boss Wang Xiaohui, when inspecting local companies on Dec. 2, stated that the potential of Sichuan’s development lies in the private economy. Guangdong’s Party boss Wang Weizhong called for attracting businesses and investments from all over the world at a business consultation symposium on Dec. 5. Zhejiang’s newly appointed Party boss Yi Lianhong personally visited Alibaba, China’s leading digital platform, on Dec. 18.
In addition, hundreds of “foreign trade” business groups have traveled overseas in the past four months to negotiate international orders. For instance, Jiangsu Province organized 268 business delegation groups of foreign trade companies, involving more than 1,400 people, to go abroad for trade negotiations. Among their 16 destination countries were Germany, France, Canada, Japan, South Korea, and the United Arab Emirates.
Experts: Minimal Effects
While the CCP is trying to boost China’s private economy, the nation’s business confidence index fell from 51.8 in November to 48.1 in December; the lowest since January 2013, according to a survey released by World Economics on Dec. 19. The index was based on a survey of sales managers at more than 2,300 companies.Yang Si, a former academician at the Chinese Academy of Sciences, told The Epoch Times on Dec. 22 that the CCP’s suppression of real estate and private enterprises in the past few years has caused industrial development and investment in China to plunge, and that the CCP’s ever-changing policies have caused private entrepreneurs to lose confidence.
“In addition, three years of COVID lockdown has caused a large number of small and medium-sized enterprises to go bankrupt and a high unemployment rate. An economic rebound is almost impossible,” Yang said.
In terms of foreign trade, the latest data from China’s General Administration of Customs released on Dec. 7 showed that the country’s total value of imports and exports in November was $522.34 billion, down 8.7 percent year-on-year, while the drop of imports also widened to 10.6 percent, much higher than the anticipated 6 percent drop.
A detailed analysis of major importers of China-made goods indicate that China’s exports to the United States fell sharply, a 25 percent year-on-year drop. It was the fourth consecutive month that experienced a year-on-year drop, and much larger than the 13 percent drop in October. China’s exports to the EU fell 10.6 percent year-on-year. In addition, China’s exports to Japan, South Korea, and Taiwan fell by 5.6 percent, 12 percent, and 20 percent respectively.
Speaking of China’s overall economy, Yang said it is experiencing increasing downward pressure, and boosting domestic demand has become the focus for the CCP’s policies. But the economy is already in full recession. Although the CCP is taking measures to cope with it, to the point of reversing its previous economic directions, there is little hope.
Dr. Gao Fengyi of the Tokyo Institute of Technology told The Epoch Times on Dec. 22 that the rapid growth of local fiscal revenue in China over the years has been from land sales. But now, the real estate sector has been plummeting and developers are cash strapped, with unfinished buildings and vacant buildings everywhere.
Moreover, after three years of strict pandemic control, many homeowners are no longer paying their monthly mortgage, not to mention finding buyers for new homes.
“The CCP is a totalitarian regime and its management style is always extreme—either completely controlling or completely ignoring the public. The sudden end of the pandemic restriction is a typical example. It is now total chaos [in China],” he said.
